This. I am endlessly surprised at how much overlap there is between people paying lip service to "sustainability" and people who demand social policies that *require* exponential growth.
All I know is that the state pension fund managers have gotten crushed these past two years. Many of them bought in big time in Sept 2008 - just as the market crashed. And a lot of them dumped everything in March - yup - just as the market shot up. And what about Stuy town in Manhattan? Florida State pension fund lost $250 million! That's gotta leave a mark. U.S. Public Pension Funds: $2 Trillion Short http://seekingalpha.com/article/180860-u-s-public-pension-funds-2-trillion-short I saw another article elsewhere some time ago - I'll try to find it.
Thanks, Misthos. You'd think people would have realized by now that something as huge a chunk of the economy as pensions cannot, over any kind of useful timeframe, grow any faster than the overall economy. Ditto for the real estate pension fund known as owner-occupied homes.
And to make things even worse -- many of these government employees, including teachers, retire at their earliest opportunity, and then come back to work as "consultants" creating a double dipping situation. My first job after college, and I have 3 degrees, involved working with government employees on joint projects. After about a year and a half I had to leave. The sense of entitlement they felt was mind boggling. And most of those I interacted with could not have obtained jobs in the private sector. The WSJ a while back had an article on this. One retired fire chief in a rural town in CA was getting a pension of about $240K/year. And then he came back as a consultant and made another $200K increasing his income to north of $400K per year if I recall correctly. And his age? I think 50 or so. He was going to realize millions in retirement. Sad. And most certainly unsustainable. Another guy -- city administrator in CA is getting almost $500K pension. Utterly pathetic. http://online.wsj.com/article/SB124580096328044597.html
The most fundamental part of the Dutch system is that it only grants indexation (i.e. pays out in line with inflation), if the pension plan in question is adequately funded (as defined by the coverage ratio). If it isn't, the pensioners don't get paid (as far as I know, neither does the pension fund administrator). Moreover, as a scheme falls below a certain funding level, the pension regulator (the Dutch Central Bank, DNB) starts to get increasingly involved. Another important thing about the Dutch system is that they actually care about the long-term viability of the setup. The rules that govern it (FTK) get scrutinized, tweaked and improved constantly by the regulator, as well as the various other industry and govt bodies. What is also quite remarkable is that the system is designed to apply indiscriminately to all pension schemes, public and private. So Misthos would be unlikely to get pissed off with some poor civil servant if he lived in Netherlands somewhere.
You can view the salary of any NJ public employee at this site. Currently working or retired. http://www.mycentraljersey.com/section/datauniverse01
I believe in NJ, annual cola increases to state pensions is limited to 60% of CPI. Rampant inflation will decimate their buying power over a period of years. My experience is that very many NJ state retirees leave the state to avoid the high tax burden (property and income).